Published in Proceedings of Logistics Research Network Annual Conference 2006, 6th-8th September 2006, Newcastle upon
Tyne, UK. Eds. Bourlakis, M .et. al. The Chartered Institute of Logistics and Transport (UK).
CHALLENGES OF WEEE ON REVERSE LOGISTICS: A CASE STUDY ON A
COLLECTION NETWORK IN FINLAND
Logistics Research Network Conference Newcastle 6th-8th September 2006
“Suistanable Logistics in an Intermodal Setting”
Ulla Lehtinen
University of Oulu
Department of Industrial Engineering and Management, Box 4610, FIN-90014 Oulu University,
Finland. Tel: + 358 40 5787644, Fax: + 358 8 5532904, E-mail: ulla.lehtinen@oulu.fi
Kari Poikela
Tervatulli Ltd.
Messipojantie 23, FIN-90520 Oulu, Finland. Tel: + 358 50 4905735, Fax: +358 20 7500219
E-mail: kari.poikela@tervatulli.fi
Abstract
The adoption of European Union’s directive on Waste Electrical and Electronic Equipment (WEEE)
causes essential changes in the field of electronic scrap recycling. In Finland the new legislation was
put in force in August 2005. The aim of the study is to discuss the problems of WEEE logistics
considering the requirements of WEEE directive. This paper first describes the requirements of the
legislation and the current situation of recycling management in Finland. The case study presents how
collection of WEEE has been organised in Northern Finland. The problems and challenges of
collection phases are discussed and an optimal model for the future is presented. The results prove
that logistical costs are high and there are unnecessary handling and transportation stages in the
current reverse supply chain of WEEE. The study also shows that legislation constraints, diverse
characteristics and reuse value of EEE have an important impact on the strategic priorities of the
future reverse logistics system of WEEE. The real challenge of collection lies in ensuring that WEEE is
collected separately so that reusable equipment are separated from non-reusable ones.
Keyword: Waste Electrical and Electronic Equipment, reverse logistics, collection process, recycling
Indroduction
The production of electric and electronic equipment (EEE) is one of fastest growing businesses in the
world. Technical innovation and market expansion of EEE are accelerating the replacement of
outdated EEE, leading to a significant increase in waste EEE (WEEE) that creates a new
environmental challenge. WEEE is a non-homogeneous and complex in terms of materials and
components. Many of the materials are highly toxic, although WEEE has high residual value (He et.al,
2006). In Western Europe 6 million tons of WEEE were generated in 1998, and the amount of WEEE
was projected to increase at least 3-5 % per year (European Commission, 2000). It is expected that in
12 years the amount of WEEE will be doubled. The European Union (EU) has established a
comprehensive body of environmental legislation. The European Union’s directive on Waste Electrical
and Electronic Equipment (European Parliament and Council, 2003) causes essential changes in the
field of electronic scrap recycling. The EU Directive on WEEE is based on the Extender Producer
Responsibility. Producers are requested to finance the collection, treatment, recovery, and
environmentally sound disposal of WEEE. The directive imposes a high recycling rate for all targeted
products. Reuse, recycling and recovery rates ranging from 50% to 80% according to the category of
equipment considered, must be archived by producers of EEE by end of year 2006. The target of
collection rate to be achieved by Member States is 4kg WEEE/inhabitant/year (ACRR, 2003). For the
national implementation of the WEEE directive, several degrees of freedom exist. As a consequence,
different structural alternatives for the reorganisation of the treatment system are possible (Walther &
Spengler, 2005) In Finland the new legislation was put in force in August 2005.
This paper first describes the requirements of the WEEE legislation and current situation of recycling
system in Finland. A case study presents how the collection of WEEE has been organised in sparsely
Published in Proceedings of Logistics Research Network Annual Conference 2006, 6th-8th September 2006, Newcastle upon
Tyne, UK. Eds. Bourlakis, M .et. al. The Chartered Institute of Logistics and Transport (UK).
populated Northern Finland. The problems and challenges of collection process are discussed and an
optimal model for the future is presented.
Reverse logistics
The management of reverse flows is an extension of traditional supply chains with used product or
material either returning to reprocessing organisations or being discarded. Reverse supply chain
management (RSCM) is defined by Prahinski and Kocabasoglu (2006) as the effective and efficient
management of the series of activities required for retrieving a product from a customer and either
dispose of it or recover value. The definition of reverse logistics by other authors (Rogers & TibbenLembke, 1999; Dekker et. al 2003) is quite similar. Activities highlighted in reverse logistics include
transportation, warehousing, distribution and inventory management. Transportation is usually the
largest component of reverse logistics costs (Stock, 1996 p.76). In general, the effective management
of reverse logistics activities is essential, because if the total costs associated with the reclamation
efforts exceeded the total cost of new materials or products, firms would have no financial incentive for
implementing a reverse logistics system. Regulatory constraints, products characteristics, return
volumes, transportation costs, disposal costs and viable disposition alternatives all have an direct
impact on the strategic priorities of the reverse logistics systems. There are four disposition
alternatives on the reverse supply chain (Phahinski & Kocabasoglu, 2006):
 Reuse, that is, to immediately reuse or resell the product;
 Product upgrade, which is to repackage, repair, refurbish or remanufacture the product
 Materials recovery, which includes cannibalisation1 and recycling’
 Waste disposal, which includes incineration and landfilling the product.
The implementation of WEEE Directive in Finland
Finland’s legislation on waste provides that producers of electrical and electronic equipment shall
organise the recycling and waste disposal of waste ensuing from products that they have brought to
the markets and shall be responsible for the costs incurred. The producer shall (Elker Oy, 2005):
 Organise a separate collection of collectable electrical and electronic waste and the necessary
storage and delivery to a preliminary treatment plant. Furthermore, a sufficiently extensive
network of collection stations must be arranged so that the end user of the product shall have
reasonable opportunity throughout country to submit the “non-wanted” product for recycling,
exploitation or other waste disposal.
 Mark all products brought to the markets after 13 August 2005 with label indicating the
producer of product and enclosed separate collection label.
 Give information to the preliminary treatment plant and households concerning the collection
systems and places.
 Inform the Pirkanmaa Environment Centre annually of products introduced to the markets and
the accumulation of the disposed products.
 Submit an application to the Pirkanmaa Environment Centre for registration in the producer
data file and enclose information on the collection station network and agreements related to
arrangements for waste disposal.
 Give sufficient security for equipment used in households to the Pirkanmaa Environmental
Centre, for example, recycling insurance or blocked blank account to ensure the fulfilment of
waste disposal obligations.
In Finland electrical and electronic equipment producers and import business have formed so far five
producer co-operatives (Serty, Flip, Selt, ICT and Nera) for purpose of organizing the collection and
recycling of WEEE. Within the supply chain of WEEE, various tasks like collection, transportation,
sorting and disassembly of products and storage and selling of material fractions as well as reusable
products and parts are conducted. The producer co-operatives are sourcing the reverse logistics from
regional operators; usually from a social economy enterprises or public institutions. A private user or
1
Market cannibalisation is defined as the decline of product or service sales due to the introduction of
another product or service, which is a substitute.
Published in Proceedings of Logistics Research Network Annual Conference 2006, 6th-8th September 2006, Newcastle upon
Tyne, UK. Eds. Bourlakis, M .et. al. The Chartered Institute of Logistics and Transport (UK).
household can bring product to a collection point free of charge. So far there are about 180 collection
points that are in most cases provided by the municipal and in some cases private companies or
social economy enterprises. On the other hand, non-private users, such as industry and offices, are
not allowed to return WEEE to collection points and they are also charged. They should agree with
regional operator about the collection or return the WEEE to sorting stations. The regional handling of
WEEE includes the sorting the EEE to re-usable and non-reusable ones. Also WEEE is divided to
different product categories. At the pre-treatment stage the reusable appliances, spare parts and
those materials that have reuse value are disassembled, stocked and delivered onwards. In figure 1,
the main steps of reverse supply chain of WEEE in Finland are presented.
Landfill
Non-reusable
materials
Industry and
Community
Private user/
householder
Reusable
materials
COLLECTION
POINTS
SORTING
STATION
PRETREATMENT
STATION
Recycling companies
Smelters
Reuse/ repair
Reusable
components
Second hand
markets
Figure 1: The reverse supply chain of WEEE in Finland
The case study
The case study (Poikela & Lehtinen, 2006) was carried out during December 2005 – February 2006 in
the region of Oulu in Northern Finland where c.a. 200 000 people are living. The aim of the case study
was, firstly, to describe the present WEEE collection concept in the Oulu region. By mapping the
collection network we were able to find out the problems and overlaps. Secondly, a new, more optimal
model is introduced, and proposals for future acts are suggested. The present stage of WEEE
collection was studied by finding out the bottlenecks, volume and “waste” as defined in lean concept.
The material and information flows between the actors were mapped and workers in different stages
were interviewed. The collection network studied is operating for Elker Ltd, which is a company
established by three producer co-operatives for manage the collection. Elker Ltd. pays transportation
costs of collection on the ground of the number of containers and for handling costs on the ground of
weight.
The present collection model.
The present stage of the collection network studied is presented in the figure 2.
Collection points in rural districts
There are totally 13 collection points in the area situated within 100 kilometres from Oulu. Local
municipalities maintained these points and each municipality ha its own collection point. The whole
system is managed by Oulu Municipal Waste Management Company providing containers to the
collection points and taking care of transportation. At collection points the returned equipments are just
put into containers or cages without any sorting. Only lamps were stocked sepatately. The amount of
WEEE brought to these collection points varies greatly; the containers are filled up from one week to
four weeks. When a container is full the personnel from the collection point orders the transportation.
The legislation of WEEE demands that the return of WEEE is documented and signed by the user. In
practice, the documentation is often forgotten and users are retuning their equipment without
guidance. The wrong handling and improper storage facilities, especially in wintertime, damage easily
returned reusable units and also allows an opportunity for stealing. On occasion, the workers have
even given away working equipment that legally belong to the producer co-operative.
Published in Proceedings of Logistics Research Network Annual Conference 2006, 6th-8th September 2006, Newcastle upon
Tyne, UK. Eds. Bourlakis, M .et. al. The Chartered Institute of Logistics and Transport (UK).
The transportation from collection points to sorting station situated in Oulu was done once a month or
when ordered. The main problem observed was that the cages were heavy and there was a lack of
proper equipment (forklifts etc) to handle the containers. Therefore, loading and unloading took a long
time.
Sorting points
From the collection points the WEEE is transported to the premises of Municipal Waste Management
Company, which also operates as a local collection point. In the premises of the Waste Management
Company WEEE is separated to cages for different product co-operatives. A private company
maintains the other sorting point, presented in the figure 2.
COLLECTION
POINTS IN RURAL
DISTRICTS
COLLECT ION AND
SORT ING ST AT IONS
PRE-TREATMENT
STATION
materials flows
HAILUOTO
HAUKIPUDAS
II
KIIMINKI
LIMINKA
UTAJARVI
YLI-II
YLIKIIMINKI
PRODUCER CO
OPERATIVE
information
flows
materials flows
MUNICIPAL WAST E
MANAGEMENT OF
OULU
KEMPELE
information
flows
MUHOS
TYRNAVA
T ERVAT ULLI LT D
ELKER LT D
informationflows
PRIVATE COMPANY
COLLECT ION
LEAD T IME
1-2 d
LEAD T IME OF
PRELIMINARY
SORT ING
1-2 d
COLLECT ION
T IME
1d
PRELIMINARY
SORT ING AND
DISASSEMBLY
INFORMAT ION PAYMENT
ABOUT T HE
QUANT IT Y OF
COLLECT ED WEEE
INVENT ORY
Figure 2. The present model of WEEE collection network in Oulu region
Pre-treatment station
Tervatulli Ltd is a social enterprise that reprocesses electrical and electronic equipments and the
materials that are generated by disassembling and sorting. Tervatulli Ltd picks up Elker’s WEEE from
sorting points by own trucks. In the pre-treatment station the WEEE is sorted to 17 different product
categories and weighted. The reusable equipments and components are separated. The WEEE is
stocked in a pre-treatment station until it is delivered to treatments plants or dispose. The information
about the collected WEEE is sent to Elker Ltd.
The new model for collection network
A proposal for new model for collection network is presented in figure 3. In this model the non-value
added stages are removed. The main difference in the material flow is that the first sorting is done
already in collection point from where the material is going directly to the pre-treatment station. Also
reusable or repairable equipment should be marked and handled differently in sorting stations. It was
Published in Proceedings of Logistics Research Network Annual Conference 2006, 6th-8th September 2006, Newcastle upon
Tyne, UK. Eds. Bourlakis, M .et. al. The Chartered Institute of Logistics and Transport (UK).
evident that packages and handling systems should be design to fit better to different categories of
WEEE. For example, sorted WEEE should be kept in roller cages instead of containers. In addition,
general guidelines for collection process are needed. Workers of sorting stations have in general low
education and they need advice and education concerning the legislation and documentation. The
documentation of returned WEEE is so far made by hand. In future, a common electronic system
should be introduced to all stages of collection chain. The transportation costs could be reduced by
outsourcing transportation to local carriers who are able to combine WEEE with other freight.
COLLECTION
AND SORTING
POINTS IN
RURAL
DISTRICTS
PRETREATMENT
STATION
Materials
flows
HAILUOTO
HAUKIPUDAS
II
KIIMINKI
LIMINKA
UTAJARVI
YLI -II
KIIMINKI
KEMPELE
MUHOS
TYRNAVA
RUSKO
PRELIMINARY
SORTING AND
CONTAINERSÕ
FILL UP TIME
7-28 d
PRODUCER CO
OPERATIVE
Information
flows
TERVATULLI LTD
COLLECTION
LEAD TIME
1-2 d
SORTING AND
DISASSEMBLY
-
ELKER LTD
INFORMATION
ABOUT THE QUANTITY
OF SORTED WEEE
PAYMENT
Figure 3: The new model for WEEE collection network in Oulu region.
Main challenges and problems of WEEE collection in future
The legislation of WEEE was put into practice in August 2005 in Finland. The producer co-operatives
and local operators are looking for the most economical practices to organise the collection. Main
challenges of WEEE collection rise from the contradiction between the legislation and benefits of the
producers. First, the legislation emphasis the reuse of WEEE. For clear reasons of efficiency, the
examination of reuse potential should take place as much upstream as possible, in order to send
reusable appliances to adequate reuse channels without damages (ACRR 2003 p.18). The case study
shows that in the present system, wrong handling and storage damage easily returned equipment and
also allows an opportunity for stealing. On the other hand, the producers do not favour reuse flow.
They are afraid of cannibalisation e.g. that reuse appliances change the market but, also because the
sorting and handling of reusable WEEE increase collection costs.
Second, the legislation demands that all the end users shall an opportunity in the whole country to
return the disposed product reasonably. So far no decisions have been made concerning the
collection policy in Northern Finland; for example the distance from collection point situated in Lappish
village to a pre-treatment station could be hundreds of kilometres.
Quite often the users have left their equipment at the retail store when a new appliance has been
bought which caused a lot of problems for retailers. One proposed solution is a mobile collection point
of WEEE. In this system collection trucks remain at scheduled times, in identified areas of the
municipality, so that citizens can bring their discarded electrical and electronic appliances.
Published in Proceedings of Logistics Research Network Annual Conference 2006, 6th-8th September 2006, Newcastle upon
Tyne, UK. Eds. Bourlakis, M .et. al. The Chartered Institute of Logistics and Transport (UK).
A third contradiction that effected on collection is the reuse value of EEE. For example, refrigerators
have negative value because they have few valuable components, but high transportation costs. On
the other hand, circuit boards have positive value because they contain many valuable materials.
Thus, the transportation and handling stages of low reuse value categories of WEEE should be
minimised.
Conclusions
From the results of the case study presented here it can be concluded that the collection and recycling
of WEEE as established in Finland has evidently environmental advantages, but the logistical costs
are high and there are unnecessary handling and transportation stages. The results highlight the
importance of cooperation and good communication between the actors of the network and between
different producer co-operatives in order to optimise collection process. The responsibilities and roles
of different parties have been unclear which have increased the handling stages and logistics costs.
The study also shows that legislation constraints, diverse characteristics and reuse value of EEE have
an important impact on the strategic priorities of the future of reverse logistic system of WEEE. The
real challenge of collection lies in ensuring that WEEE is collected separately that reusable equipment
are separated from non-reusable ones, and both are sent to the adequate treatment facilities. Thus,
an efficient collection system will depend on accessible and efficient collection facilities and adequate
and consistent guidance to the personnel in collection points. Finally, it needs to be pointed out that
long distances in sparsely populated areas of Finland and the diversity of the WEEE brings special
challenge to manage efficiency the reverse logistics.
References
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Published in Proceedings of Logistics Research Network Annual Conference 2006, 6th-8th September 2006, Newcastle upon
Tyne, UK. Eds. Bourlakis, M .et. al. The Chartered Institute of Logistics and Transport (UK).